Mercaton Group market positioning

Mercaton Group market positioning

6 min read

|

October 2, 2024

6 min read

|

October 2, 2024

by

Maksymulian Gudyma

What and how?

Mercaton Group is positioning itself as a later-stage fund with a focus on special situations projects that have lower valuations at entry which translates into higher upside potential (with additional risks with a defined strategy to mitigate them).

Why?

VC Funds types

VC funds come in various types, each with a specific focus or strategy tailored to different stages of a company’s lifecycle, industries, geographies, or other investment criteria. Primary types of venture capital funds divided by target development stage include:

  • Seed funds focus on the earliest stage of a startup's lifecycle, providing capital for developing ideas, building prototypes, and achieving product-market fit. Investment sizes are typically small, ranging from a few thousand to a few million dollars. The risk level is high, as these startups are often pre-revenue and may not have a fully developed product.

  • Early-Stage Funds invest in startups that have progressed beyond the seed stage but are still in the early growth phase, often during Series A and sometimes Series B rounds. The investment size is larger than seed funds, typically ranging from $2 million to $15 million. The risk level remains high, though these companies usually have a product and some market traction.

  • Growth Equity Funds focus on investing in mature companies with established business models that seek capital for rapid scaling, typically during Series C and beyond. Investment sizes range from tens to hundreds of millions of dollars. The risk level is lower than seed or early-stage investments, as these companies usually have proven revenue streams and market presence.

Target returns

  • Start-Up Firms: the typical loss rate for early-stage investments is 65% (i.e., two-thirds return less than the initial outlay). This means that 35% must generate gains much greater than 1x to achieve an acceptable overall result. The average holding period of a VC investment is eight years. All that implies that to achieve 25% IRR for investors Early Stage Funds seek 6x invested capital what means that average return on successful project needs to be at 10x-12x (assuming reinvestments).

  • Later-Stage Companies:  the loss rate for later-stage companies is less than 30%, in contrast to the 65% number for early-stage counterparts. By the same token, average holding periods are shorter – six years, on average. This means that in order to realise the planned IRR of 20%, the fund must achieve a return of 3x. To achieve such a result, successful projects must achieve an average return of min. 4x (without reinvestment due to the shorter period than in the early stage). 

Contact

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Mercaton Group

Austrasse 14, 9495 Triesen, Liechtenstein


Director Onefund AG


Traderegister number: FL-0002.723.962-3


Capital: 50.000 CHF

Copernicus SSF GmbH

Am schrägen Weg 19, 9490 Vaduz, Liechtenstein
Directors Kurt Lallemand and Karl Heinz Hemmerle
Traderegister number FL-0002.721.2634
Capital: 10.000 CHF

Connect with us

Contact

Let’s start a conversation

Join us for a chat about how you can become a part of what we do

Mercaton Group

Austrasse 14, 9495 Triesen, Liechtenstein


Director Onefund AG


Traderegister number: FL-0002.723.962-3


Capital: 50.000 CHF

Copernicus SSF GmbH

Am schrägen Weg 19, 9490 Vaduz, Liechtenstein
Directors Kurt Lallemand and Karl Heinz Hemmerle
Traderegister number FL-0002.721.2634
Capital: 10.000 CHF

Connect with us

Contact

Let’s start a conversation

Join us for a chat about how you can become a part of what we do

Mercaton Group

Austrasse 14, 9495 Triesen, Liechtenstein


Director Onefund AG


Traderegister number: FL-0002.723.962-3


Capital: 50.000 CHF

Copernicus SSF GmbH

Am schrägen Weg 19, 9490 Vaduz, Liechtenstein
Directors Kurt Lallemand and Karl Heinz Hemmerle
Traderegister number FL-0002.721.2634
Capital: 10.000 CHF

Connect with us

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